During the COP26 conference in Glasgow last year, the UK government announced that large companies and financial institutions would be required to publish their net-zero transition plans by 2023, making their goals clear for decarbonising to meet national 2050 net-zero targets.
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With COP27 approaching and the deadline for net-zero transition plans around the corner, now is the time to start thinking about your company’s strategies for reducing carbon emissions to ensure you don’t get left behind.
- What Is a Net-Zero Transition Plan?
- What Should You Include in a Net-Zero Transition Plan?
- Why Are Net-Zero Transition Plans Necessary?
- What Is the Net-Zero Transition Timeline?
- What Can We Expect From COP27?
What Is a Net-Zero Transition Plan?
With countries across the globe setting out a unified goal to create a low-carbon economy, a net-zero transition plan is a document required from companies which outlines how changes will be made individually to support these global efforts.
The UK government has now set up and implemented a high-level Transition Plan Taskforce and a Taskforce on Climate-Related Financial Disclosures (TCFD) to support UK companies in outlining their low-carbon targets and the means via which they’ll be reached.
What Should You Include in a Net-Zero Transition Plan?
Your net-zero transition plan should address the following:
- High-level targets you intend to implement to mitigate climate risk, including greenhouse gas reduction targets (also known as a net-zero commitment)
- The interim milestones you’ll need to achieve to see these high-level targets met and how you’ll measure these interim goals
- The actionable steps you’ll take along the way as you work towards your end goal
A good net-zero transition plan will consider the full scope of your company’s carbon footprint, incorporating the carbon emissions you have direct control over and those you influence in the way you operate.
It’s important to remember that the solutions you intend to put in place will need to address your company’s culture. You’ll need to ensure your whole organisation is aligned in their efforts to work sustainably and shares an understanding of why their efforts are essential to meet your targets.
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Why Are Net-Zero Transition Plans Necessary?
Climate change is a severe driver of species extinction. It also causes extreme weather, including hotter temperatures and severe and more frequent storms. The resulting impact means fewer food supplies and poorer public health, making many global communities more vulnerable to poverty.
The critical threshold for stabilising the climate has been calculated. If we exceed a 1.5C degrees temperature rise, nature is less likely to be able to adapt, meaning further loss of our natural carbon sinks, increased emissions and a detrimental impact on national and global ecosystems and communities.
Nature’s carbon sinks, including forests, peatlands, wetlands and oceans, currently absorb more than half of the carbon dioxide being released. Climate change puts this at risk. Deforestation, land destruction and thawing of the Arctic permafrost are transforming many carbon sinks into carbon sources.
The climate crisis can’t be solved single-handedly and can’t be fixed overnight. Transition plans are crucial if we are to succeed in unifying targets and processes across organisations, countries and continents to ensure sustainability pledges turn into real climate action.
Additionally, the climate crisis can’t be solved without effectively tackling this loss of nature. That’s why plans for protecting and restoring nature should also be included in all net-zero transition strategies.
What Is the Net-Zero Transition Timeline?
While net-zero transition plans have not yet been made mandatory in the UK, organisations are advised to make a start on their plans for becoming carbon neutral as early as possible.
Doing so now will enable you to get ahead of the curve and be better prepared for when these new mandates are formally introduced, which is expected to come in 2023.
What Can We Expect From COP27?
At COP26, the UK government announced the goal to become the world’s first Net Zero-aligned Financial Centre. With this, instructions were rolled out for UK financial institutions to introduce a “robust, firm-level transition plan”, setting out their targets for decarbonising to assist the UK in reaching national and legally-binding net-zero targets.
The initiatives outlined at COP26 will be followed up at the upcoming COP27 conference, held in Sharm El-Sheikh, Egypt, from 6th-18th November 2022. The forum has been organised to “move from negotiations and planning to implementation”, harmonising global efforts to facilitate “full, timely, inclusive, and at-scale action on the ground.”
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